It's even worse than we feared: Cost of national debt to each family is a staggering £138,360

Britain's debt mountain is the equivalent of £138,360 for each household in the country, research reveals today.

The national debt is even larger than initially feared, according to a think-tank.

Official figures, from the Office for National Statistics, show the total public sector debt is estimated to be £876billion, equal to £33,100 per household.

Tough decisions: Chancellor George Osborne speaks to businessmen and women at the annual British Chambers of Commerce Conference in London yesterday. Experts say the latest figures show that Government is right to press on in its drive to cut state spending

If the debt from the banks rescued by the State is included, the figure balloons to £2,252billion, according to the ONS.

The banks are Lloyds Banking Group, Royal Bank of Scotland, Northern Rock and Bradford & Bingley, which have all been rescued since February 2008.

But the Centre for Policy Studies think-tank says in a report that the real figure is £3,617billion, which is four times larger than the original ‘bank-free’ figure.

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That is the equivalent of £138,360 each if it were divided between all the 26million households in the country. It is also the equivalent of 240 per cent of Britain’s economic output.

Tory MP Brooks Newmark: 'We have to be honest with taxpayers about the true extent of the liabilities.'

Brooks Newmark, Tory MP and co-author of the report, The Hidden Debt Bombshell, said: ‘The size of the country’s debt is bad, but actually it is even worse than people think.

'We have to be honest with taxpayers about the true extent of the liabilities. Otherwise, it is Enron accounting.’

This is a reference to the American energy giant which collapsed into bankruptcy a decade ago after a web of false accounting was uncovered.

Experts said the figures highlight the urgent need to sort out Britain’s debts or risk a financial crisis like the one unfolding in Portugal. The CPS report says Britain’s debts are larger because three vital factors are excluded from the Government’s accounts.

The biggest is the cost of the unfunded public sector pension liability, estimated by the CPS to be £1,180billion, although latest Government estimates say it is far lower at £770billion.

This is the cost of paying the cost of the ‘pension promises’ that have been made to state workers, who account for one in five of the workforce, such as teachers and NHS workers.

It also excludes the debt from public projects paid for under the private finance initiative, which are estimated to be £169billion, and the debts of Network Rail, estimated to be around £24billion.

Mr Newmark said: ‘It is clear that the extent of UK indebtedness is such that the Coalition must be relentless in its efforts to cut the deficit as quickly as possible.’